"We are willing to talk to them [Iran] directly and give them a clear choice and ultimately let them make a determination in terms of whether they want to do this the hard way or the easy way," Obama said during an interview Sunday on Meet the Press.

"We need to ratchet up tough but direct diplomacy with Iran, making very clear to them that their development of nuclear weapons would be unacceptable, that their funding of terrorist organizations [and] their threats to Israel are contrary to everything we believe in," he said.

"In terms of carrots, we can provide economic incentives that would be helpful to a country that despite being a net oil producer is under enormous strain, huge inflation [and] lots of employment problems," Obama said.

"But we also have to focus on the sticks," he said. "In order for us to change Iran's behavior, we may have to tighten up those sanctions," Obama said.

In response to the President-elect's call to the international community to adopt a carrot-and-stick policy toward Iran, Foreign Ministry spokesman Hasan Qashqavi said the US will first have to recognize his country's "nuclear right."

Qashqavi also said Obama would have to come up with a non-confrontational approach to breach the impasse.